Whether you are a home owner, a buyer, or a seller, knowing you are covered if any major issues arise gives peace of mind. Lets explore the many benefits of a home warranty.
First of all, what is a home warranty? To answer that question, let’s rule out what it is not. Warranties are not intended to be replacements for homeowner’s insurance. Insurance covers things like fire, flood, burglary, and other major issues depending on your policy. On the other hand, “a home warranty is a contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a home’s major components, such as the furnace, air conditioning, plumbing and electrical system.” (investopedia.com)
Home warranty companies have agreements with certain service companies in your area. When an issue arises with a customer, the warranty company calls on a qualified technician to investigate the problem, determine the solution, and provide the services needed. The cost to the customer is usually a small service fee (on top of the initial purchase price of the warranty) rather than the possible large amount that would be owed if there was no home warranty.
What will you pay? You will be responsible for a yearly premium that varies depending on the type of warranty and the selected coverage. Also, the type of dwelling makes a difference – whether single family, condo, townhome, etc. On top of this premium, you have the set fee for service calls and possibly a small portion of the repair. These premiums and fees, however, do not come close to the big chunk of change it would cost you to replace a furnace or repair plumbing issues.
What are the benefits? Buyers, sellers and home owners can all benefit from a home warranty. The purpose is to protect you in the event of an unforeseen issue or breakdown of covered appliances/systems. They offer a way for repairs without breaking the bank. On a repair that could ultimately cost hundreds or even thousands of dollars, if you have a home warranty, your part will only be a fraction of that.
Why would you want to buy a home warranty if you are selling you are selling your home? There are actually several reasons why a seller would benefit from purchasing a home warranty. Here are a few…
- According to a Gallop Poll, 8 out of 10 buyers prefer to purchase a home covered by a home warranty.
- Homes covered by a warranty attract more buyers because it eases the fears of future cost of appliance break downs.
- Your home will stand out above the others if you have a home warranty.
- Home warranties help to keep closing delays at a minimum
The purchase of a home warranty should be carefully considered by the buyer, seller, or homeowner before signing any papers. While the benefits are obvious, there are still things to consider…like whether you want to pay for extended coverage, what fees are associated with the plan, and are the premiums worth the cost?
Call us today! We can help you decide whether a home warranty is right for you!
Source: hmsnational.com, investopedia.com